So, what is a credit dafault swap anyway.

[Wilber_Stool]

This was posted in the Economy forum yesterday. It explains credit default swaps better than any I've found.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x44087

[nradisic]

1. Basically...

Credit default swaps are insurance against default on any debt instrument used by banks and all financial institutions. The problem is that they have not been regulated and in the last ten years, credit default swaps have grown to over $45 trillion dollar A large default by one bank can just snowball into a total financial collapse. Now that banks and institutions are going under, there is not anywhere near enough money to pay off on these "insurance policies" and that could trigger a total meltdown on the worlds' entire banking system with no one being able to accees cash that they need to run their businesses and pay their daily bills. That means we are all totally part of a financial meltdown that is basically due to the fact that the GOP never bothered to even begin to look at regulating Wall Streets shenanigans....

[dipsydoodle]

2. Thanks for that.

Well worth reading. :hi: